Subsection 28(1) - Farming or fishing business
Cases
Hadler Turkey Farms Inc. v. The Queen, 86 DTC 6013, [1986] 1 CTC 81 (FCTD)
Jerome, A.C.J. held that although s. 28 should be interpreted as giving to the taxpayer "the open-ended option to switch from the accrual method to the cash method," "once a taxpayer files his return on the accrual basis, the cash option no longer exists for that taxation year".
Pollon v. The Queen, 84 DTC 6139, [1984] CTC 131 (FCTD)
"There is no requirement whatsoever that the taxpayer be personally engaged in any physical sense in the farming activity. Gentlemen or absentee farmers would benefit from the privilege providing the income in issue is derived from farming ... [A]ctivities may be contracted out by the taxpayer [as was the case here] and the latter will still be considered as engaging in a farming operation."
Administrative Policy
23 September 2014 T.I. 2013-0509021E5 F - Rajustement obligatoire
In the course of confirming its position in 9328315 F, CRA stated (TaxInterpretations translation):
[S]ows and boars which are still in inventory at the end of the fiscal period and which the producer purchased and paid for, could be held in inventory even if they were not used in the production of piglets. Likewise, pigs and piglets still in inventory at the end of the fiscal year which the producer purchased and paid for could be held in inventory even if they were not used in the producer's operation of raising animals.
26 November 1992 T.I. 923506 (September 1993 Access Letter, p. 411, ¶C20-1161)
A post-dated cheque received under the Gross Revenue Insurance Program, that is accepted as security for the debt owing to the taxpayer without extinguishing the debt, is brought into income on the date that the cheque is payable. A request by the farmer to have the cheque post-dated in a subsequent year does not alter RC's views.
26 May 1992 T.I. 5-920606 -
An advance received by a cash-basis farmer on the delivery of corn to a private grain elevator will be treated as income rather than as a loan.
11 October 1991 T.I. (Tax Window, No. 11, p. 17, ¶1522)
Where a cash-basis farmer pays for feed prior to the year end, he will be permitted a deduction in the year of payment provided that he obtains title to the feed in that year.
5 March 1991 T.I. (Tax Window, No. 1, p. 17, ¶1133)
Where a cash-basis farm ceases operations, payments made thereafter for accounts payable incurred by the farmer while he was operating the farm will be deductible provided the payments would have been deductible in computing the income of the farming business and the claim is bona fide.
10 September 1990 Memorandum (Tax Window, Prelim. No. 1, p. 8, ¶1010)
Discussion of fiscal period issues respecting a bankrupt farmer.
28 May 1990 T.I. (October 1990 Access Letter, ¶1488)
Where inventory purchased by a farmer is much greater than the requirements of his farming business as would be the case where he consistently sells the excess purchases to other farmers in subsequent fiscal years, RC will consider that he is carrying on a commodities business in addition to a farming business.
19 September 89 T.I. (February 1990 Access Letter, ¶1103)
A crop which has been grown from purchased seed would not be included in purchased inventory for purposes of s. 28(1)(c). However, trees which have been grown from seedlings or one or two-year old trees would be so included.